Altruistic traders - why?

[Nick1984]

I would like to take this opportunity to offer out cyber cookies to all. Let the good vibes spread!


Talking about vibes: one of the best feel good movies ever is this low budget Australian flic called "The Castle" I love it. If you can find it watch it!

[notouch]

I agree PYenner. Sometimes you have to be cruel to be kind. With 90% of traders blowing their accounts, when you see some totally clueless newbie asking questions I don't think you're helping them by giving them false hope.

[torero]

I agree that you can do your best to advise and help but it's finally each person's own burden to take the advice and carry it out to succeed. Failure comes from not following their own rules, not because the books and forums didn't give the right answer. We give what we can but nothing can be done after it's imparted. Some will find let in and absorb the advice and change accordingly to merge with the markets' expectations. We also fail and fail again despite knowing all the rules and remind ourselves not to do it again. 90% fail because they cannot meet such high expectations of themselves.

[MrPaul]

	Quote:	thetradingdoctor
	This is an interesting discussion as it brings up the issue of how traders are classified. There is a taxonomy of traders, much like the taxonomies in the animal kingdom. In this regard, I would like to how from each of you: what is your definition of a speculator? Thanks Janice

Good question, My best response could be summed up as such...

A speculator is someone who is willing assume market price risk by purchasing or selling an asset in expectation of excersizing a profit from the net difference after the transaction is completed.

I should note that a speculator is different from a hedger, spread trader, arbitrager etc. And is very different than a gambler.

[cooter]

	Quote:	MrPaul
	I should note that a speculator ... is very different than a gambler.

How so, MrPaul?

[MrPaul]

	Quote:	cooter
	How so, MrPaul?

Well the short answer to that would be a Gambler engages in a game or activity in which outcome of that activity depends partially or totally upon chance. aka There is typically no statistical edge involved in the process of gambling. Like a state lottery or bingo.

A speculator will typically act on some sort of statistical edge and engage not blind chance, but in the probability of the situation at hand.

Now I know that these examples open up a can of worms due to the fact that there is a major difference between an amatuer speculator, a professional speculator, a gambler that plays for fun and a gambler who engages gambling in the capacity of a professional speculator.

[mp_trader]

	Quote:	MrPaul
	Well the short answer to that would be a Gambler engages in a game or activity in which outcome of that activity depends partially or totally upon chance. aka There is typically no statistical edge involved in the process of gambling. Like a state lottery or bingo. A speculator will typically act on some sort of statistical edge and engage not blind chance, but in the probability of the situation at hand. Now I know that these examples open up a can of worms due to the fact that there is a major difference between an amatuer speculator, a professional speculator, a gambler that plays for fun and a gambler who engages gambling in the capacity of a professional speculator.

As a semi-professional poker player, I consider a gambler as one who participates in an activity in which the outcome is based entirely upon chance. Having a long term statistical edge over most players in the game I played, I referred to my playing - somewhat euphemistically - as a series of very short term investments. I guess you could call me a professional speculator.

I have found a couple similarities between poker and trading; both can require a "tuition" nearly equal in time and money to that of a traditional degree, and both require a couple years to determine one's actual success. The latter point is not discussed nearly enough in the trading books I've read.

[thetradingdoctor]

Anyone who trades the markets is likely well served by understanding their microstructure. While the book can be tedious and not totally transparent at times, I think we can all be served by having a look at Trading Exchanges by Larry Harris. It provides an interesting taxonomy of trading types. It is a large book and expensive ( somewhere aroung $US60), so this type of book purchase is not to be taken lightly and only for serious traders who want this type of in-depth understanding of market microstructure. You don't need it to make money! I can assure you of that. What is does is put the various players in the market into some kind of interesting perspective.

Hope this helps a bit!

Janice

[cooter]

Indeed, it does help - thanks for sharing, Janice.

In fact, here's an early draft of Prof Harris' tome for everyone reading pleasure.

http://www-rcf.usc.edu/%7Elharris/Tr...ok-extract.pdf

Enjoy!

P.S. More info about Prof Harris can be found here:

Professor Larry Harris's USC Home Page

[The Bear]

	Quote:	cooter
	How so, MrPaul?

In my opinion casino/card gamblers are not speculators...but most speculators are gamblers.